Fall officially begins this Saturday, September 23, yet real estate transactions that occur post-Labor Day would be considered “fall activity”. Unfortunately, things aren’t off to a good start for some market segments as we near the end of September.
For one, co-op activity continues to lag, which has been the case for several years now even before high interest rates came into play. Stringent and outdated rules along with highly bureaucratic procedures by co-op boards has been a turn off to buyers, leaving them to explore other options. Also, mortgage rates are adversely affecting low-income buyers, as they are being priced out by debt-to-income and post-closing liquidity requirements. It doesn’t help that monthly co-op charges are on the rise in many buildings due to local city laws.
The New Development market also seems to be taking a hit. Developers waiting for a favorable economic climate to launch sales may need to list this fall due to loan conditions, which potentially may lead to price reductions for units that have struggled to sell. Due to supply and labor shortages, some projects missed out on the booming post-lockdown markets, while others failed to sell because their units were priced too high for the high-rate environment.
Manhattan’s Luxury market also isn’t faring well this month, as expected. September is historically the worst month for high-end sales “because of the Labor Day holiday, back-to-school distractions and the Jewish holidays,” according to Donna Olshan, president of Olshan Realty. Only 10 luxury contracts were signed last week—the lowest since early September last year.
Although Brooklyn is not considered a “market segment” in itself, it’s noticeably bucking the trend, showing favorable conditions. Over the years it has evolved into a primary market, due to its appeal in offering greater value to buyers for their investments. In fact, it consistently outpaces Manhattan in terms of expediency. Activity appears to remain on track as we head into the fall season.
While these may be challenging times for some market segments, Sandy Krueger, CEO of Staten Island Board of Realtors, reminds us that “difficult times create opportunities for those who are alert to the signals that the market offers.” This is why the proverbial phrase, “when life gives you lemons, make lemonade” is a perspective every broker should apply when seeking opportunities for their clients that others may have overlooked.